Bayer AG saw its shares climb by 6.4% following the Supreme Court’s decision to hear the Durnell Roundup case. The justices will determine whether federal pesticide law preempts state-level claims brought by plaintiffs who allege that exposure to glyphosate, the active ingredient in Roundup, caused non-Hodgkin lymphoma. The outcome could set a precedent affecting more than 125,000 pending lawsuits worldwide and reshape Bayer’s potential liability exposure, with analysts estimating that a favorable ruling could eliminate liabilities currently reserved at over $16 billion.

The Durnell case centers on a California couple whose trial jury awarded $25 million in damages, later reduced by the Ninth Circuit to $3.5 million. Bayer has maintained that decades of regulatory reviews by the EPA and other global agencies have found glyphosate to be safe when used as directed. A decision upholding federal preemption would likely lead to the dismissal of many state court actions and reduce Bayer’s legal provisions by up to 40%. Conversely, an adverse ruling could spur further jury awards and force the company to increase its reserves, potentially impacting cash flow and dividend policy.